Greek island of Lesbos 'on the verge of explosion' with more than 15,000 asylum seekers, minister says

 

Photo: A Syrian refugee (L) carries two children after arriving on a dinghy on the Greek island of Lesbos. (Reuters: Dimitris Michalakis)

Related Story: Britain and France vow to accept tens of thousands of asylum seekers

Map: Greece

The Greek island of Lesbos is "on the verge of explosion" with the arrival of more than 15,000 mainly Syrian asylum seekers pushing local resources to the limit, the immigration minister said.

Yiannis Mouzalas said that boats taking asylum seekers to the Greek mainland would soon be using a second port to ease pressure on the island of 85,000 inhabitants.

"Mytilene currently has 15,000 to 17,000 refugees and this is the official figure from all services," Mr Mouzalas said.

[The asylum seekers] are very aware that Greece has an economic crisis ... they're not looking to impose themselves, they're just seeking a better life

Kate O'Sullivan, communications officer for Save the Children in Lesbos

"We are placing emphasis here because the situation is on the verge of explosion."

The minister said the second departure point would open at the fishing village of Sygri in coming days.

Lesbos is one of several Greek islands struggling with an influx of thousands of migrants, many of them Syrian refugees, setting sail from the nearby Turkish coast.

Video: Save the Children's Kate O'Sullivan discusses the situation in Lesbos. (The World)

"We hope that in the next five days the [islanders] and the refugees will see clear signs of improvement," he said.

Kate O'Sullivan, a communications officer from Save the Children's emergency response unit, recently ABC's The World program that the vast majority of asylum seekers arriving in Lesbos were landing in Lesbos with the intention of heading further into Europe.

"Everybody I speak to, most of them want to move on [to other European countries], they're very aware that Greece has an economic crisis," she said.

"They're not looking to impose themselves, they're just seeking a better life."

There have been clashes on Lesbos in recent days between police and migrants, and between migrants of different nationalities, over delays in the registration process that have held up their journeys on to other countries in Europe.

Syrians have been granted priority in the registration process, sparking tensions with other migrants forced into long waits on the island.

More than 230,000 people have landed on Greek shores this year, with the numbers soaring in recent weeks as people seek to take advantage of the calm summer weather.

Photo: Refugees and migrants wait for a registration procedure at the port of Mytilene on the Greek island of Lesbos. (Reuters: Dimitris Michalakis)

AFP/ABC

From other news sites:

• The Courier-Mail: Syrian refugee crisis: Prime Minister Tony Abbott under pressure as Europe buckles under refugee influx
• The Sydney Morning Herald: Migrant crisis: Austria to halt measures letting migrants cross from Hungary
• CBS News: U.K. to re-settle up to 20,000 Syrian migrants
• Daily Telegraph: Migrant crisis: Refugees welcomed in Germany like war heroes as Berlin expects 10,000 in one day
• CBC: Refugee crisis: Angela Merkel says EU must share burden of refugee influx

Greek island of Lesbos 'on the verge of explosion' with more than 15,000 asylum seekers, minister says - ABC News (Australian Broadcasting Corporation)

How Greece Can Help Itself

By James Surowiecki

Credit Illustration by Christoph Niemann

If there’s one message that Greece should take away from its recent confrontation with the euro zone, it’s that it will never get the help it really needs. Assuming that the deal goes through, Greece should be able to reopen the banks and keep the economy from total collapse. But, with that economy having shrunk by a quarter in five years and an unemployment rate over twenty-five per cent, it needs real stimulus spending and a much looser monetary policy. Neither is on offer. Even if Greece gets the debt relief that the I.M.F. is recommending, the next few years will be grim. As James Galbraith, an economist at the University of Texas at Austin, who assisted the former Greek finance minister during this year’s negotiations, told me, “What’s going to happen in Greece is going to be very sad.”

So what can Greece do? It really has only one option—to make the economy more productive and, above all, to export more. It’s easy to focus on Greece’s huge pile of debt, but, according to Yannis Ioannides, an economist at Tufts University, “debt is ultimately the lesser problem. Productivity and the lack of competitive exports are the much more important ones.”

There are structural issues that make this challenging. Greece is never going to be a manufacturing powerhouse: almost half of all Greek manufacturers have fewer than fifty employees, which limits productivity and efficiency, since they don’t enjoy economies of scale. Greece also has a legal and business environment that discourages investment, particularly from abroad. Contractual disputes take more than twice as long to resolve as in the average E.U. country. Greece has been among the most difficult European countries in which to start and run a business, and it has myriad regulations designed to protect existing players from competition. All countries have rules like this, but Greece is an extreme case. Bakeries, for instance, can sell bread only in a few standardized weights. Recently, Alexis Tsipras, the Greek Prime Minister, had to promise that he would “liberalize the market for gyms.”

The scale of these problems makes Greece’s task sound hopeless, but simple reforms could have a big impact. Contrary to its image in Europe, Greece has already made moves in this direction: between 2013 and 2014, it jumped a hundred and eleven places in the World Bank’s “ease of starting a business” index. And reform doesn’t mean Greece needs to abandon the things that make it distinctive. In fact, in the case of exports, the country has important assets that it hasn’t taken full advantage of. Greek olive oil is often described as the best in the world. Yet sixty per cent of Greek oil is sold in bulk to Italy, which then resells it at a hefty mark-up. Greece should be processing and selling that oil itself, and similar stories could be told about feta cheese and yogurt; a 2012 McKinsey study suggested that food products could add billions to Greece’s G.D.P. Similarly, tourism, though it already accounts for eighteen per cent of G.D.P., has a lot more potential. Most tourists in Greece are Greek themselves, a sign that the country could do a much better job of tapping the booming global tourism market. Doing so would require major investments in improving ports and airports, and in marketing. But the upside could be huge. Greece also needs to stem its current brain drain. It produces a large number of scientists and engineers, but it spends little on research and development, so talent migrates abroad. And there are other ways that Greece could capitalize on its climate and its educated workforce; as Galbraith suggests, it’s an ideal location for research centres and branches of foreign universities.

To implement such changes, Greece will have to overcome other problems. Reforms work best when the level of trust in political institutions is high. But the Greek state has a poor reputation among citizens, who see it as a pawn of special interests. (This distrust of the government is one reason for the country’s notoriously high rate of tax evasion.) On top of this, the chief advocate of structural reform to date has been the much hated troika, whose obsession with austerity has made the mere notion of reform anathema. Opening up the Greek economy would benefit ordinary citizens, since the economy’s myriad rules and regulations serve mainly to protect the wealthy and those lucky enough to have won a sinecure. But that’s a hard sale to make at a time when people are worried about holding on to what they have.

Nonetheless, it’s a sale that Alexis Tsipras should try to make. As Ioannides told me, “We know from looking at other countries that, for reform to work, the government and the public really need to own it.” Right now, no one in Greece really owns reform. Still, Tsipras has considerable political capital. He could use that capital to spend the rest of his time in office inveighing against austerity. But Germany has made it painfully clear that that will have no effect. Instead, Tsipras should forget about what Europe isn’t going to do, and focus on what Greece can do for itself. He should make the case for why Greece needs to focus on exports; make it easier for young people to find jobs and start businesses; and even allow loaves of various weights and liberalized gyms. This isn’t the platform that Tsipras ran on. But it’s the platform that Greece needs him to govern on. ♦

How Greece Can Help Itself - The New Yorker

Tsipras and Varoufakis: a messy split for Greece's double act

By Yannick Pasquet (AFP)

© AFP/File / by Yannick Pasquet | Alexis Tsipras swept to power in Greece in January 2015, hiring maverick economist Varoufakis as his finance minister

Alexis Tsipras and Yanis Varoufakis shared a vision once, but the double act of the Greek debt drama's most colourful characters now appears well and truly over.

When Tsipras swept to power as prime minister in January, hiring maverick economist Varoufakis as his finance minister, both vowed to stand up to Athens' much-loathed creditors and bring an end to the austerity they blamed for strangling the Greek economy.

With a shared love of motorbikes and a hatred of neck-ties, they were the fearsome twosome who took Greek politics by storm.

But eight months later, with Greece facing snap elections in which Varoufakis refuses to run, the rift between the pair is growing uncomfortably public -- even if analysts say it is unlikely to do Tsipras much damage as he seeks a fresh mandate at the head of radical-left party Syriza.

The polls on September 20 will be "quite sad and fruitless", Varoufakis told Australian broadcaster ABC.

Former Greek finance minister Yanis Varoufakis attends a parliamentary session in Athens on July 15, 2015 Louisa Gouliamaki, AFP/File

"The party that I served and the leader that I served has decided to change course completely and to espouse an economic policy that makes absolutely no sense."

Tsipras quit on August 20, triggering new elections, after a major rebellion within Syriza over Greece's huge third international bailout left him barely able to govern.

Varoufakis had resigned six weeks earlier, a day after Greece's referendum on the proposed bailout, and as negotiations with the creditors -- the EU, IMF and European Central Bank -- grew increasingly bitter.

His confrontational tactics had infuriated the creditors for months, and in a blog post announcing his resignation he said he had been "made aware" that his departure would be helpful to Tsipras in continuing the talks.

"I shall wear the creditors' loathing with pride," Varoufakis wrote, adding that he would "fully support" the prime minister.

- 'This deal won't work' -

But that was before Tsipras' spectacular U-turn. Just days later, Tsipras agreed to a deal that would see Greece accept 86 billion euros ($96 billion) in exchange for sweeping reforms -- more austerity of the kind that voters had just rejected in a referendum.

Alexis Tsipras, leader of the radical leftist party Syriza, gives a speech at the party's central committee in Athens on August 29, 2015 Angelos Tzortzinis, AFP/File

Since then Varoufakis, never one to mince his words, has repeatedly blasted the deal in his frequent interviews with the international media.

"Ask anyone who knows anything about Greece's finances and they will tell you this deal is not going to work," he told BBC radio.

Tsipras has hit back, saying of Varoufakis: "Being a good economist doesn't make you a good politician."

And in a pointed tribute to Varoufakis' replacement -- who is as discreet and tight-lipped as his predecessor was confrontational -- he added: "Euclid Tsakalotos has done a marvellous job... If it wasn't for him, we wouldn't have achieved a deal."

Varoufakis has said he now wants to focus on building an anti-austerity network across Europe, a project that analysts say should not directly threaten Tsipras at the polls.

Greece will go to the polls again on September 20, 2015 Louisa Gouliamaki, AFP/File

Tsipras "still enjoys a degree of sympathy amongst Greeks. This election is up for grabs," said Gabriel Colletis, a France-based economist who has advised Syriza.

At least 25 Syriza lawmakers who opposed the bailout have quit to form a new party, Popular Unity. But Colletis said of Varoufakis: "He won't be joining forces with the rebels' new party."

- 'Narcissistic one-upmanship' -

For Michel Vakaloulis, a political scientist at the University of Paris, it was Varoufakis' failure to embrace compromise that made the split with Tsipras inevitable.

Varoufakis himself later revealed that he had failed to convince Tsipras to back proposals he had wanted to take to the ECB, marginalising him within the government.

His flashy personal style also jarred with Syriza, "a very austere party", Vakaloulis said.

Greece's former finance minister Yanis Varoufakis rides through Athens with his wife on July 6, 2015 Andreas Solaro, AFP/File

A photo shoot with a glamorous French magazine was one moment that reflected his habit of "narcissistic one-upmanship". With a quarter of Greeks unemployed, the shots of him "on his terrace eating fish, against the backdrop of the Acropolis" served to further alienate him from Syriza, Vakaloulis said.

Both men had charm and chutzpah, but in other ways they were very different.

Varoufakis had zero experience as a politician until January, while Tsipras, who at 41 is 13 years his junior, was on the barricades as a student activist and has barely left politics since.

While Tsipras stayed in Greece, Varoufakis lived for years in Britain and Australia and delivers a stream of eloquent English every time a microphone is thrust under his nose.

But it was partly this difference in gifts that led Tsipras to hire him in the first place, Vakaloulis observed.

"Tsipras chose him precisely for his huge talents at communicating -- to show that Greece is not an isolated case in Europe, but that it's a story that could happen to any country."

Tsipras and Varoufakis: a messy split for Greece's double act

Greece to hold parliamentary election on September 20th

World August 29, 2015

The president of Greece has signed a decree that dissolves parliament and sets the date for new elections on September 20th.

President Prokopis Pavlopoulos signed the decree on Friday.

The country's previous parliamentary election took place in January this year. But Prime Minister Alexis Tsipras abruptly announced his resignation earlier this month to seek a public mandate for his fiscal reform plan.

Tsipras has been facing a backlash from members of his own ruling Syriza Party after accepting austerity measures in return for a bailout from Eurozone nations. Some senior lawmakers left the party.

The government is also facing criticism from citizens. The latest poll suggests that the Coalition of the Radical Left that Tsipras leads still holds a 20 per cent approval rating, the highest among all parties.

But the poll also suggests that New Democracy, which was the largest opposition party, is catching up in popularity.

Analysts say attention will be focused on whether the elections will help Tsipras boost his leadership to carry out structural reforms as a prerequisite for the new bailout.

Greece to hold parliamentary election on Sep. 20th - News - NHK WORLD - English

Greece names Supreme Court Judge Vassiliki Thanou as interim PM

By Vasudevan Sridharan , Rachel Middleton August 28, 2015

Greece's top Supreme Court judge Vassiliki Thanou attends a swearing in ceremony as the country's caretaker prime minister, at the Presidential Palace in Athens, Greece(Alkis Konstantinidis/Reuters)

Greece has named top Supreme Court judge Vassiliki Thanou as prime minister of the caretaker government, making her the first female leader to head the country.

Thanou's nomination by President Prokopis Pavlopoulos came after all the major political parties failed to form a government. The official date of the general election, the fifth in the last six years, will be announced by Pavlopoulos shortly but it has been widely touted to take place on 20 September. The 65-year-old judge was sworn in on 28 August, and the cabinet will be appointed on Friday afternoon.

Thanou, a specialist in European law, assumed the helm of the male-dominated supreme court earlier this year, becoming only the second woman to hold the post since 1835, The Guardian says.

She was trained at the Sorbonne in Paris and is a mother of three. In the five years that Greece was battling with international creditors, she took on a leading role as a trade unionist protecting colleagues from pay cuts imposed on the judicial sector, the paper said.

She has been very vocal in the fight against austerity, having taken on former prime ministers who tried to implement policies that she maintained were illegal. In February, she sent a letter to the European Union commission chief Jean-Claude Juncker saying the radical left government had the support of the Greek people.

Veteran diplomat Petros Molyviatis is expected to be named foreign minister while Giorgos Houliarakis, a key member of the Greek delegation in the third financial bailout, is likely to become the finance minister.

The announcement has ended the week-long imbroglio in Greek politics. The elections were triggered by outgoing premier Alexis Tsipras's resignation after he faced rebellion from his own Syriza party over the handling of the Greek financial crisis and the international bailout plan. Tsipras is hoping to boost support for his left-wing Syriza in the polls to strengthen the credibility of the bailout programme.

In a television address on the same day of Thanou's swearing-in, Tsipras said it was now up to the Greek voters to give their verdict on the Greek bailout programme and his party's handling of the issue.

The 41-year-old Syriza leader, who is widely expected to win, has ruled out any potential deal with any of the centrist parties. Syriza's hardliners were furious at Tsipras after he accepted the third bailout in July 2015 despite coming to power riding on the wave of an intense anti-austerity campaign.

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Greece names Supreme Court Judge Vassiliki Thanou as interim PM

People want jobs, not ideology

ALEXIS PAPACHELAS

Realizing that your job, and whether you get to keep it, depends on people who have never worked is infuriating. I used to listen to older people saying that it was important for those appointed to responsible positions in the public sector to have paid their social security contributions. They were right.

Today we are to a large extent governed by people with no notion of the market. Their work was never evaluated and they never knew the fear of being laid off. For them, school and university were places for political activity. Political movements turned into a profession and the people they interact with enjoy the privilege of safe positions in public sector departments or universities. Ideological obsessions come first for them, and they are always concerned with what their people will say. They care very little if a decision they take leads to 10 or 100 people losing their jobs.

Personally, I came to realize the magnitude of their ignorance with the introduction of the capital controls. While experts explained in detail the effects of such a measure to all those involved, they faced denial and an inability to fully comprehend. Those in power believed no one would be affected based on the following argument: “Who has the ability to withdraw so much cash every month? Certainly none of our voters.” Everything goes through the prism of politics, while there is a sense of aversion toward figures and technocratic analyses. Most worrisome is the fact that they could not imagine the destruction capital controls would bring to small and medium sizes business, exporters, banks and everywhere else.

But let me be fair. What I’m describing here is not taking place for the first time. Previous governments also included ministers and state officials whose careers were built on a process of leaving the lecture theatres for party offices, without ever entering the market. The difference now is the ideological obsession, the near hatred for entrepreneurship and private initiative. What we see now are politicians and party officials in key positions who believe we should all be employed in the public sector, while the rest should be taxed endlessly so that the system can stand on its feet.

Out of despair, society put its trust in these people. At the end of the day, however, people want jobs. And as they start realizing that their children will never be appointed to the public sector, they will come to see that the country will never return to growth given the kind of politicians running the country today.

At this point, the only convincing story would be that of a self-made, uncorrupted businessman with no state contracts, who could explain to them how he started from scratch and persuade them that the country could do the same. Greeks couldn’t care less about parties and ideologies. They want jobs, for themselves and their children.

People want jobs, not ideology | Comment | ekathimerini.com

The Catastrophic International Consequences of the Capitulation of Syriza and the Criminal Responsibility of Mr Tsipras

by Yorgos Mitralias

Athens.

As was to be expected, the direction taken by the Tsipras government after the fatal day of July 13 confirmed the pessimistic forecast (1) that it would turn with unheard cynicism and violence – albeit only verbal for the moment – against those who dare challenge its total pro-memorandum transformation. And since the ‘Tsipras Tendency’ in Syriza has chosen to take charge of a new government that would govern the country with the absolutely decisive collaboration of all the neoliberal parties (New Democracy, PASOK, Potami), its offensive was clearly directed solely at the opponents of its government program, i.e. the third Momorandum. And naturally, these opponents are not to be found in yesterday’s opposition which has now turned into a government partner, but first and foremost in the left wing of Syriza, which is now the main opposition force, seeing as Golden Dawn and the PCG (KKE) are in the words of their leaders, lately in agreement with the Tsipras government that Greece must remain faithful to the Euro!

The fact that all these changes and “unimaginable” reversals of the political map of the country took place in less than a month makes the stunned citizens even more embarrassed and confused. However, a somewhat closer look at the evolution of the Tsipras government would have been enough to prepare us for its final Ovidian metamorphosis. Indeed, we should have been warned by their continuous retreats during their first five months of negotiations with the creditors. – and above all, by the rightward spread that began on the very day of the formation of Tsipras government with ministerial appointment of individuals without any social base who not only had not the slightest connection with Syriza, but were insulting them in public just days before the election! As, for example, Mr. Mardas who, on January 17, 2015 – that is to say just a week before the victory of Syriza – published a particularly foul article against Syriza MP Rachel Makri:”Rachel vs Kim Yong and Amin Dada”which concluded with the very rhetorical question (highlighted by himself) ” are these the people who are going to govern us?”. Ten days later this same Mr. Mardas became, by the grace of the Dragasakis/Tsipras duo, Deputy Minister of Finance and, together with the Minister of Interior Mr. Panoussis (2) assumed the role of ideological mentor, pillar and Inspector General of the new government, with practical duties that far exceeded his economic competence, which were more and more extended by successive decisions of Mr. Tsipras.

If we add to all this the long and gradual “normalization” of the party and its sympathizers, in order, in view of its coming to power,  to neutralize the most “disturbing” elements and at the same time offer “those on top” the necessary pledges that …” you have nothing to fear from us” then the Tsipras government’s pro-memorandum metamorphosis appears as an almost” natural outcome “of a route doomed to lead to that result. What is more, an outcome whereby a Tsiprist “normalized” Syriza  into European Social Democracy will turn out to be equally “natural”, especially since we are already witnessing some “disharmony” in its relations even with the European Left Party. In short, no surprise since the worm of betrayal of July 13 was a long time in the body which gave birth to “the first left-wing government in the history of Greece”. In the same way that the worm of betrayal of August 4, 1914 existed in German social democracy -and internationally- who negated its whole reason for existence by voting for war credits for the slaughter of the First World War.

While taking account of differences, the present capitulation of Syriza and its government will have the same or even worse consequences in Greece than those resulting from the betrayal of the SPD in Germany in that fateful August of 1914. However, even though the disastrous consequences for the Greek Left have already begun to be measured, it is a remarkable fact that no one here in Greece is concerned at the no less disastrous consequences of the Tsipras Government’s submission to neoliberalism outside Greece, in Europe and the whole world.

Without hesitation, we believe that Mr. Tsipras and his staff bear downright criminal responsibility in creating the dangerous situation provoked by their particular capitulation,   in the ranks of the international left, the social movements and among progressive citizens of Europe! But realistically, what more could you expect from people who, for months or years, have turned their backs so ostentatiously on movements of solidarity of “those from below”, which developed almost everywhere in Europe and beyond (3) while at the same time they still preferred to seek allies just in the places where all one could find was sworn enemies among the international Social Democrats and the various brands of Hollande, Renzi and Schultz!?

Indeed, given that Syriza was until recently the flagship and at the same time the source of inspiration and hope to the European left – already enmeshed in a deep crisis- at the beginning of the 21th century, one can say that its capitulation will have catastrophic consequences similar to those that had a century ago the capitulation of what was at that time the flagship party of the international labour and socialist movement, that is to say, German social democracy. Here it is no longer a question of a simple working hypothesis to be confirmed by events. From all corners of Europe, but also beyond, we are confronted by an avalanche of messages reporting a feeling of deep disappointment, anxiety or even despair that  is spreading among millions of citizens in and outside Europe, who believed that under the leadership of Syriza, they could finally fight together successfully against austerity and the “debt-system.”

One must admit that the situation created in the international socialist and progressive movement by Syriza’s capitulation is terribly dangerous. It is not just that there are thousands and thousands of people who are forced to abandon all activism and to withdraw into themselves; nor that there are as many who feel paralysed and choose to wait passively for the course of events. It is especially that Syriza’s betrayal comes at a very critical historical moment, when the racist extreme right is advancing almost everywhere in our continent, which already makes immediate and direct the threat that many of the citizens Europeans disappointed by Syriza will fall prey to this racist and neo-fascist self-proclaimed “anti-systemic” extreme right.

Bearing in mind all the above, our conclusion is that it is of the utmost urgency for the resistance front against the Memoranda, which is under construction, to heed with all speed – today and not tomorrow – the call of millions of citizens in Europe and the world who continue to invest their hopes for a Greece which resists neoliberal barbarism, by taking international initiatives of concrete and visible struggle. Time is running out and any equivocation could be fatal for us. Moreover, it is by assuming these so very important internationalist tasks that the Greek Left could not only move on but also bring the difficult struggle in Greece to a safe conclusion.

Notes

1. See “Black days: 4^th August 1914 Germany and 13^th July 2015 Greece” (http://cadtm.org/Black-days-4th-August-1914-Germany)

2. Coming from the “Democratic Left”, which participated and supported at least one pro-memorandum government, Yannis Panoussis, Interior Minister in the Tsipras government, distinguished himself in recent months for his daily diatribes against what he called the “Left of nothing”, the President of a Parliament “which is the domain of psychiatrists,” Yanis Varoufakis “who deserves to go before the special court,” Marxists “lost in space”, Youth and trade unionists of Syriza … and by his praise of “Law & Order” and repression against anything that moves. Incidentally, it was under his command that the Greek police – for the first time in the history of the country- raided universities,  violating the traditional university asylum.

3. See « Quelle réponse de Syriza aux millions de citoyens solidaires de par l’Europe ? » (http://cadtm.org/Quelle-reponse-de-Syriza-aux). And  « Nos meilleurs alliés, les 300.000 de Puerta del Sol ! » (http://cadtm.org/Nos-meilleurs-allies-les-300-000)

Translated by Julian Silverman

The Catastrophic International Consequences of the Capitulation of Syriza and the Criminal Responsibility of Mr. Tsipras

'The wave has reached us': EU gropes for answers to migrant surge

MARTON DUNAI

A surge in migrants, many of them refugees from Syria, hit Hungary's southern border on Tuesday, passing through gaps in an unfinished barrier to a Europe groping for answers to its worst refugee crisis since World War Two.

Nearing the end of a flight from war and poverty, they walked around or over coils of barbed wire strung out along Hungary’s 175-km (109-mile) frontier with Serbia, children hoisted on shoulders, bags in hand.

“The wave has definitely reached us now,” said Mark Kekesi, head of a migration NGO called MigSzol Szeged. “There have never been this many of them, and we expect this to continue for a while.”

The Balkans is in the grips of an unprecedented surge in migration fuelled by war in Syria and instability across the Middle East.

More than 100,000 migrants have entered Hungary, part of Europe’s Schengen zone of passport-free travel, this year en route to the more affluent countries of western and northern Europe. While still small in comparison with the record numbers on the move nearer conflict zones, the flow is increasing.

The influx into Hungary ticked up on Monday to its highest daily rate this year – 2,093. More were on their way, with an estimated 8,000 making their way through Serbia and 3,000 crossing from Greece into Former Yugoslav Republic of Macedonia (FYROM) every day.

Hungary demanded more money from the EU to alleviate the burden, saying the distribution of funds was “humiliating.” One senior European official said that, in the absence of action, “Europe has failed.”

The United Nations refugee agency, UNHCR, warned against expecting numbers to fall any time soon. “We do not see any end to the flow of people to come in the coming months,” said a spokeswoman.

Hungarian fence

Even as the migrants entered, the Hungarian army was busy building a border fence to keep them out, bulldozers and heavy machinery shifting earth and erecting walls.

The fence is finished in parts, while in others there are coils of barbed wire easily negotiated by migrants who faced down stun grenades and tear gas in FYROM last week.

One family of Kurds from Syria waited patiently for an army truck to pass, before one by one they scaled a padlocked gate in the fence, disappearing down a dirt road the other side.

“We have skills, we can survive anywhere,” 30-year-old Hassan, an IT engineer from Syria, said after walking across the border into Hungary. “We don’t just come to Europe to eat and sleep. We’re looking for safety. It’s better to walk across half of Europe than to stay in Syria.”

A record 50,000, many of them Syrians, reached Greek shores by boat from Turkey in July.

Greece, embroiled in a debilitating economic crisis, is ferrying them from overwhelmed islands to the mainland, from where they head north to FYROM and points beyond.

FYROM sealed its border to them last week, but gave up in the face of huge and determined crowds. FYROM and Serbia are now moving them on as fast as they can.

The Lasta bus company in Belgrade said it had increased its daily departures to the northern Serbian town of Subotica near the Hungarian border from seven to 24.

The crisis is severely testing the unity of the 28-nation EU and fuelling anti-immigration sentiment.

Germany says it expects a record 800,000 asylum-seekers to arrive this year; protests in the eastern town of Heidenau, near Dresden, over the arrival of 250 asylum seekers turned violent over the weekend and police said they were investigating a suspected arson attack on a sports hall in the eastern state of Brandenburg where some 130 were due to be housed.

Finance Minister Wolfgang Schaeuble said the influx would affect the country’s budget plans but that Europe’s biggest economy could cope.

Sinking ship

Hungary, however, called for more money.

“Old member states have nicked the money from new members,” Janos Lazar, the chief of staff of Hungary’s right-wing prime minister, Viktor Orban, told the daily Magyar Hirlap newspaper.

“If we do not take meaningful steps, we will become a lifeboat that sinks beneath the weight of those clinging onto it," he said, in what appeared to be a reference to the deaths of over 2,000 migrants this year trying to reach Europe on overcrowded boats across the Mediterranean.

Critics point out that the vast majority of migrants who enter Hungary do not linger, determined to reach the likes of Austria, Germany and Sweden where they join up with relatives and friends in search of work and security.

But Orban has taken a harder line than other EU leaders, saying such an influx carries risks of terrorism, crime and unemployment. He says the EU does not have a coherent solution, and also faces pressure at home from far-right opponents.

A spokeswoman for the European Commission, the EU’s executive arm, said Hungary's share of a seven-year EU budget to 2020 for asylum, migration and policing was more than 85 million euros and Budapest's request for 8 million euros more this year was being fast-tracked.

Hungary's concerns about immigration via the Balkans would be addressed during a summit of regional leaders with senior Commission officials in Vienna on Thursday.

The Commission has made clear its disapproval of the Hungarian fence, with its Cold War echoes in ex-Communist eastern Europe, but Hungary faces no sanction for building it.

“Europe has failed. Europe has to get moving,” the deputy president of the European Commission, Frans Timmermans, told Europe 1 radio on Tuesday. “So far, many member states have thought they can go it alone. That doesn’t work. We have to do it together.”

[Reuters]

'The wave has reached us': EU gropes for answers to migrant surge | News | ekathimerini.com

Greek bailout: Alexis Tsipras steps down to trigger new elections

Jon Henley Friday 21 August 2015

Prime minister announces his resignation and paves way for general election, with 20 September predicted as most likely date for a poll

Alexis Tsipras resigns: ‘I am proud of the battle I have fought’ Video 

Seven months after he was elected on a promise to overturn austerity, the Greek prime minister, Alexis Tsipras, has announced that he is stepping down to pave the way for snap elections next month. As the debt-crippled country received the first tranche of a punishing new €86bn (£61bn) bailout, Tsipras said on Thursday he felt “a moral obligation to place this deal in front of the people, to allow them to judge … both what I have achieved, and my mistakes”.

The 41-year-old Greek leader is still popular with voters for having at least tried to stand up to the country’s creditors, and his left-wing Syriza party is likely to be returned to power in the imminent general election, which government officials told Greek media was most likely to take place on 20 September.

Greek PM resigns to trigger snap elections - as it happened

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The prime minister insisted in an address on public television that he was proud of his time in office and had got “a good deal for the country”, despite bringing it “close to the edge”. He added that he was “shortly going to submit my resignation, and the resignation of my government, to the president”. The prime minister will be replaced for the duration of the short campaign by the president of Greece’s supreme court, Vassiliki Thanou-Christophilou – a vocal bailout opponent – as head of a caretaker government.

Tsipras won parliamentary backing for the tough bailout programme last week by a comfortable margin, but suffered a major rebellion among members of his ruling Syriza party, nearly one-third of whose 149 MPs either voted against the deal or abstained.

The revolt by hardliners, angry at what they view as a betrayal of the party’s anti-austerity pledges, left Tsipras short of the 120 votes he would need – two-fifths of the 300-seat assembly – to survive a censure motion, leading to speculation that he would call an early confidence vote.

He has now decided to skip that step, opting instead to go straight to the country in an attempt to silence the rebels and shore up public support for the three-year bailout programme, which entails a radical overhaul of the Greek economy and major reforms of health, welfare, pensions and taxation.

Government sources had long suggested that an announcement on early elections was on the cards as soon as Athens had got the first instalment of the new package – Greece’s third in five years – and completed a critical €3.4bn debt repayment to the European Central Bank, due on Thursday.

Some analysts had speculated that the prime minister might wait until early October, by which time Greece’s creditors would have carried out their first review of the country’s reform progress and perhaps come to a decision about debt relief – a potential vote-winner for the prime minister.

Greek bailout Q&A: What happens next?

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But he appears to have calculated that it was better to go to the polls sooner rather than later, aiming to capitalise on his popularity before the effects of some of the harshest new bailout measures – including further pension cuts, VAT increases and a controversial “solidarity” tax on incomes – started to make themselves felt.

Greece’s complex constitutional laws mean that, because Tsipras was elected less than a year ago, President Prokopis Pavlopoulos cannot immediately call an election when the prime minister resigns.

Instead, he must first consult the other major parties to see if they could form a government – a near impossibility given the current makeup of the parliament.

Greece’s main opposition party leader Vangelis Meimarakis is to meet Pavlopoulos on Friday morning, according to an official from Meimarakis’s New Democracy party said. But the move is seen as largely procedural, with Meimarakis standing little chance of pulling together the numbers to form a governing coalition.

At the end of a bruising seven months of negotiations with Greece’s international lenders that nearly resulted in the country defaulting on its mammoth debts and crashing out of the euro, Tsipras was eventually forced to sign up to a rescue package that many in his party view as an unforgivable U-turn.

Greece crisis timeline: the rocky road to another bailout

Will they, won’t they plot of latest Greek bailout drama has seemingly reached a conclusion. We look back at the year’s twists and turns

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Tsipras has insisted that accepting creditor demands for further tough reforms was the only way to ensure his country remains in the Eurozone – which is what opinion polls show the overwhelming majority of the Greek population want.

Syriza is now likely to split, with a formal announcement thought to be imminent. The leader of the party’s dissident Left Platform, the former energy minister Panagiotis Lafazanis, announced last week that he intended to form a new anti-bailout movement, accusing the government of capitulating to the “dictatorship of the Eurozone”.

The prime minister’s closest aides had conceded on Thursday that the divisions within Syriza had to be dealt with one way or another. The energy minister, Panos Skourletis, told state broadcaster ERT: “The political landscape must clear up. We need to know whether the government has or does not have a majority.” The party is now thought likely to call an extraordinary congress in September to resolve its internal differences.

The credit rating service Moody’s warned that the ensuing political uncertainty could hit Greece’s ability to implement tough reforms under its bailout programme and receive rescue loans in exchange.
“The Greek prime minister Tsipras’s move to step down and call snap early elections on 20 September could elevate programme implementation concerns and potentially puts future official sector disbursements at risk,” said Moody’s.

Recent opinion polls have put support for Syriza at about 33%-34%, making it by far the country’s most popular party – but not popular enough to govern without a coalition partner. No polls have been published since late July, but Syriza insiders remain optimistic.

Dimitris Papadimoulis, a Syriza MEP, told Mega TV: “These elections ... will provide a stable governing solution. My feeling is that Syriza will have an absolute majority.”

The political uncertainty took its toll on markets on Thursday, with Greek two-year bond yields jumping 78 basis points to 12.15% – well above the level considered sustainable – and the Greek stock market closing down 3.5%.

Greek bailout: Alexis Tsipras steps down to trigger new elections | World news | The Guardian

Greek prime minister Alexis Tsipras resigns, calls for early elections

Friday 21 August 2015

Greek prime minister Alexis Tsipras has submitted his resignation and called for early elections, saying it is up to the Greek people to decide his future.

Photo: Greek Prime Minister Alexis Tsipras has announced his resignation and called for early elections. (Reuters: Alkis Konstantinidis)

Related Story: Eurozone ministers approve 23 billion euros for Greek bailout

Map: Greece

Key points

• Alexis Tsipras resigns, calls early election
• Greece in the hands of caretaker government
• Election tipped for September 20

Mr Tsipras submitted his resignation to president Prokopis Pavlopoulos and asked for the earliest possible election date.

"I will shortly meet with the president of the republic and present my resignation and that of my government," Mr Tsipras said in a televised address to the nation on Thursday.

"I want to submit to the Greek people everything I have done (since taking office in January) so that they can decide once more."

The election is expected to be held on September 20, the Greek news agency ANA said, citing government sources.

Now the Greek people have to have their say.

Greek prime minister, Alexis Tsipras

The move leaves Greece in the hands of a caretaker government until the vote.

Mr Tsipras, who has been the Prime Minister since January, has faced a recent rebellion in his governing Syriza party over austerity measures demanded in a massive new international bailout worth about 86 billion euros ($129 billion) over three years.

Nearly a third of Syriza party MPs refused to back the program in parliament last week, robbing him of a guaranteed political majority.

Mr Tsipras took the decision to call snap polls after meeting with members of his cabinet and as speculation swirled that he was to step down in a bid to regain office with a stronger hand.

Tsipras says up to Greeks to decide on his performance

Mr Tsipras successfully persuaded Greeks to reject tough reforms in a referendum last month, only to adopt them at a Eurozone summit a week later.

The hard-left leader said it was up to Greeks to judge whether he adequately represented them in a battle with foreign lenders on austerity demands.

"I want to be honest with you. We did not achieve the agreement we expected before the January elections," he told the Greek people.

Tough bailout terms explained

The key points of the agreement between Greece and its Eurozone partners that includes punishing austerity measures.

"I feel the deep ethical and political responsibility to put to your judgment all I have done, successes and failures."

The government on Thursday cleared 3.4 billion euros ($5.1 billion) owed to the European Central Bank, the ECB confirmed.

The payment marked an urgently needed truce in a row that saw Greek banks shuttered, the economy battered and nearly saw Greece thrown out of the Eurozone.

But the bailout included more pain in the form of tax hikes, as well as a pensions overhaul and privatisations the government had previously opposed. Many Greeks viewed it as a humiliating climb-down.

The European Commission, one of the creditor institutions overseeing the new rescue package, earlier welcomed reports of a snap election saying it would politically bolster the just launched bailout, Greece's third in five years.

"Swift elections in Greece can be a way to broaden support for ESM stability support program just signed by prime minister Tsipras on behalf of Greece," tweeted Martin Selmayr, chief of staff to commission head Jean-Claude Juncker, referring to the EU bailout fund.

The election would be the second in eight months in Greece.

Greece's complex constitution has special stipulations for holding elections less than 12 months after the previous vote.

This means the president must first consult other major parties to see if they can form a government — a highly unlikely option.

Greek stocks fell on Thursday in the face of the political uncertainty, down 3.5 per cent.

Reuters/AFP

From other news sites:

• Daily Mail: Greek PM Alexis Tsipras announces his resignation and calls a snap election for next month
• News.com.au: Greece's Tsipras resigns, calls snap polls
• USA Today: Greece gets huge bailout check; snap elections likely
• Huffington Post: Greek PM Tsipras Poised To Call Early Elections
• Times of India: Greek PM Alexis Tsipras resigns, calls for early election

Greek prime minister Alexis Tsipras resigns, calls for early elections - ABC News (Australian Broadcasting Corporation)

The violent maturity of Mr Tsipras

Το Βήμα Online Sunday, August 02, 2015

The maturity of Mr Tsipras was truly violent. He himself harboured delusions. He believed that SYRIZA's electoral win would cause a schism in the conservative Europe of  Merkel and Schauble, that it would change the political correlations and allow him to soften the austerity policies.

Today, after the six-month adventure of clashing with the dominant forces in Europe, he admits that he made mistakes, that he overestimated the capabilities of negotiating politically, while underestimating the technical aspect of the negotiations, as well as the operation and rules of the European Union.

At the same time he did not take into consideration that his politics allowed his inter-party opponents, who had be preparing for a clash with him for some time, to open their stride and make demands that exceeded the limits of the Constitution.

To Vima reveals today that before the European Summit, Mr Lafazanis and the Left Platform got to the point where they asked the Prime Minister to accept Schauble's proposal for an orderly exit from the euro, foolishly believing that Greece would then get rid of the austerity and bailouts.

Mr Tsipras found himself between a rock and a hard place, between the dominant in conservative Europe and his inter-party anti-bailout orthodoxy, from which he could not escape unscathed.

He could not accept Lafazanis' proposal because he did not have such a mandate, nor could he adopt the raid to seize power that was required for a return to a national currency. He would be violating the Constitution, the very democratic principles on which he was sworn in.

He therefore chose the hard European solution, while also assuming the huge cost. He is now giving a battle for domination in his party – which he seems to be winning – and is also struggling to heal the wounds inflicted on the economy in the past six months.

As it would seem he will do anything for an agreement by the 18^th of August, he will will accept everything agreed with Europe, whether he likes it or not. Of course he will also have to create the necessary conditions for the proper implementation of everything described in the new bailout with the heads of the four institutions.

At present nothing guarantees the normalization of the financial circumstances, nor of course the elimination of the so-called political risk. A lot depends on the stance of the Prime Minister, from his determination, patience and ultimately his maturity as a political leader, who is fully assuming his responsibilities and is prepared to sacrifice himself without a second though, for the country and its people.

Antonis Karakousis

Originally published in the Sunday print edition

The violent maturity of Mr Tsipras - Το Βήμα Online

SYRIZA’s faulty perspective

Το Βήμα Online Thursday, August 06, 2015

Everything that has happened over the past six months stems from the perception formed by SYRIZA’s leadership regarding the country’s condition.

Most within the governing party treated Greece as a country in a state of perpetual humanitarian crisis.

From as early as 2004, analysts of the current governing party described the dramatic conditions in Greek society, dominated by poverty and absolute inequalities. Not that they did not exit, but not the extent that they believed.

Their narrative, criticism and approach stemmed from the distorted belief that Greeks are fundamentally poor, with limited income and to a great extent, fully dependent on the State.

With the party’s central offices situated on Koumoundourou Square, they were influenced by what they saw on the square for years.

So it escaped their attention that Greek society is more complicated, that its social stratification is not as clear, that the shadow economy is huge, that there are hidden wealth and indissoluble bonds – family and others – which transform or falsify the first impression.

They had not even taken into consideration the description of the famous Greek multiagency, this peculiar Greek situation where a person has many properties and incorporates many differing and conflicting interests.

A Greek citizen may be an employee, owner of real estate and a farmer, trader or self-employed simultaneously. This means that his position is above average and as such, his social and political behaviour is not unified and stable, but rather fluid and dependent on which interests prevail each time. The end result is an anarchic behaviour, of wanting everything right here, right now.

That is more or less how SYRIZA never accepted that tax evasion and illicit trade are national sports, where everyone – from the poorest to the wealthiest - is participating. Nor did the governing party ever realize that everyone wins from the financial waste.

Consequently, the perverse anti-memorandum monoculture and denial of austerity in all forms prevailed, which in turn allowed for the development of the so-called drachma alternative.

Everything happens in due time though. The humanitarian crisis described early on will unfortunately occur, as a result of SYRIZA’s obsessive beliefs on implementing economic policy.

The impasses became quickly apparent; the faulty perspectives nearly collapsed automatically as soon as the government rose to power and now, under the weight of the responsibility, the government has began to go back on its pledges, as expected.

Unfortunately this came late and the delay has caused unique damages.

Let us hope that they are not irreparable and that there is still time and power to reverse the conditions of absolute catastrophe.

Antonis Karakousis

SYRIZA’s faulty perspective - Το Βήμα Online

Mr Tsipras’ sufferings are a lesson for everyone

Το Βήμα Online Sunday, August 09, 2015

Deceptions, myths and hopes have collapsed since the elections.

In the seven months that followed, the Greek people experienced a lot.

At first, after the elections, the enthusiasm of change and the expectation of a different policy dominated.

Quickly though, especially after Yanis Varoufakis' first public antics, doubts began to emerge.

Again though, the dominant compulsions prevailed and imposed a foolish line of negotiating until the end.

The prevailing belief within the government was the Europeans could not endure with a possible rift within the Eurozone and would therefore back down in the end.

In the meantime, since February, the Greek economy began experiencing the problem of limited liquidity and living in a state of restricted funding sources.

As the Tsipras government played the delay game, Mr Draghi's European Central Bank tightened the grip on liquidity.

Around the start of Spring and with an impending impasse looming, dangerous plans were being developed for a parallel currency by the former Minister of Finances, and the more advanced return to the drachma by the Left Platform.

By the end of June the government systematically played this dangerous delay game, leaving the economy fully exposed, while constantly losing power and options.

Ultimately the doomsday scenarios prevailed, the outflow of deposits turned into an avalanche and when the talks broke off and the referendum was announced everything spiralled out of control.

By removing the protection provided by our participation in the European program, the possibility of a disorderly bankruptcy emerged, capital controls were introduced and the possibility of leaving the Eurozone was directly addressed.

The full extent of the impasse was revealed at the summit. Under the weight of the unbearable consequences of the looming necessary return to the drachma, in the final hour the Prime Minister decided to make a big turn and full assume the responsibility and cost of remaining in the Eurozone.

Now the government is anxiously awaiting the third bailout, offering guarantees of its faithful implementation and preparing for a crucial party conference as well as elections.

Nobody could imagine such a crazy turn of events in six months.

However, it was six months of revealing the truth and fully understanding the Greek problem.

Ultimately the delusions ended along with a harsh return to reality.

Let us assume, that the lesson has been learned by everyone, the parties and the people.

Antonis Karakousis

Originally published in the Sunday print edition

Mr. Tsipras’ sufferings are a lesson for everyone - Το Βήμα Online

Greece Gets $14.5 Billion to Pay Debts, Part of New Bailout

  ATHENS, Greece — August 20, 2015

Greece was receiving the first 13 billion-euro ($14.5 billion) payment of its new bailout Thursday, with 12 billion euros earmarked for repaying debts and the remainder for settling arrears to public sector suppliers.

Athens was using the funds to repay a 3.2 billion euro ($3.5 billion) debt instalment due Thursday to the European Central Bank — an amount it could not have afforded to repay without the bailout from 18 other European nations that share the euro currency with Greece.

European bailout fund supervisors approved the release Wednesday evening.

Without the rescue loans — Greece's third bailout in little more than five years — the country would have defaulted on its debts and faced being forced out of the Eurozone.

The new three-year bailout is worth 86 billion euros ($95.6 billion), and the disbursement of funds is dependent on the Greek government implementing a series of reforms, including steep tax hikes and spending cuts.

Accepting the conditions was a major reversal of policy for Prime Minister Alexis Tsipras and the coalition government between his radical left Syriza party and the small nationalist Independent Greeks. It has cost him a major rebellion within Syriza that threatens to split the party and could lead to an early election as soon as next month.

Tsipras has been contemplating his options after a parliament vote to approve the bailout conditions led to dozens of his own party lawmakers voting against him. Among the options being discussed are for him to call a vote of confidence in his government or to call an early election, potentially in September.

The government has said its main priority was to secure the bailout funding and the repayment of the ECB loan on Thursday, after which it would announce any further action.

Tsipras won January elections on promises to repeal similar austerity measures attached to Greece's two previous bailouts. But he has said accepting creditor demands for yet more reforms was the only way to ensure his country remains in the Eurozone, which opinion polls have shown the vast majority of his population wants.

Hardliners within his party have accused him of capitulating to unreasonable demands that will plunge the Greek economy further into recession.

Greece Gets $14.5 Billion to Pay Debts, Part of New Bailout - ABC News

Germans to run Greek regional airports in first wave of bailout privatisations

Associated Press in Athens Wednesday 19 August 2015

Fraport AG taking over 14 airports in deal worth €1.23bn that is among requirements as Greece receives billions in loans to keep it afloat

Thessaloniki airport, one of 14 in Greece to be run by a German company as a condition of bailout funding. Photograph: Sakis Mitrolidis/AFP/Getty

Greece has agreed to sell to a German company the rights to operate 14 regional airports. The deal is the first in a wave of privatisations the government had until recently opposed but must make to qualify for bailout loans.

The decision, published in the government gazette on Monday night would hand over the airports including several on popular tourist island destinations to Fraport AG, which runs Frankfurt Airport, among others across the world.

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The deal, worth €1.23bn euros (£0.9bn/$1.37bn), is the first privatisation decision taken by the government of Alexis Tsipras, who was elected prime minister in January on promises to repeal the conditions of Greece’s previous two bailouts.

The government initially vowed to cancel the country’s privatisation programme but Tsipras caved in to win a deal on a third international bailout for Greece, worth €86bn. Without the rescue loans Greece would default on its debts and risk being forced out of the euro.

Mytilene airport Odysseus Elyitis on Lesvos (top left), Rhodes airport Diagoras (top right), Chania airport Daskalogiannis, Kavala airport Megas Alexandros, Thessaloniki airport Macedonia and Aktion aiport are part of the deal with German company Fraport, the operator of Frankfurt airport. Photograph: Orestis Panagiotou/EPA

Separately the government slightly relaxed its restrictions on banking transactions, allowing small amounts to be sent abroad for the first time in about two months.

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The finance ministry’s amendments, also published in the government gazette, include allowing Greeks to send up to €500 abroad per person per month, and allowing up to €8,000 per quarter to be sent to students studying abroad to cover accommodation costs.

Greeks can now also open new bank accounts that will have no withdrawal rights, in order to repay loans, social security contributions or tax debts.

The government restricted banking transactions in late June to prevent a bank run after Tsipras announced a referendum on creditors’ terms for a new bailout.

The bailout deal is getting its final approvals in parliaments in several European states. Lawmakers in Spain and Estonia approved it on Tuesday while those of Germany and the Netherlands are expected to do so on Wednesday.

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Tsipras is widely expected to call a confidence vote in his government this week, after dozens of Syriza lawmakers voted against him during the ratification of the new bailout deal in Parliament last Friday.

Germans to run Greek regional airports in first wave of bailout privatisations | World news | The Guardian

Greece creditors raise 'serious concerns' about spiralling debt levels

Larry Elliott and Jon Henley in Athens Thursday 13 August 2015

Analysis by trio of European creditors forecasts Greek debt to peak at 201% of GDP in 2016 and that debt relief may be necessary

Greek finance minister Euclid Tsakalotos walks away after addressing the parliament. Photograph: Alexandros Vlachos/EPA

Greece’s European creditors have underlined the temporary nature of the country’s surprise return to growth by warning that they have “serious concerns” about the spiralling debts of the Eurozone's weakest member.

The economic news came as Greece’s parliament met in emergency session on Thursday to ratify a new bailout deal, although it was unclear whether the multibillion-euro agreement had the vital backing of Germany.

The three European institutions negotiating a third bailout package with the government in Athens said that the Greek economy had plunged into a deep recession from which it would not emerge until 2017.

According to an analysis completed by the European commission, the European Central Bank and the Eurozone bailout fund, Greece’s debts will peak at 201% of its national output (GDP) in 2016.

The study says that Greece’s debt burden can be made more bearable by waiving payments until the economy has recovered and then giving Athens longer to pay. However, it opposes the idea of a so-called “haircut” – or reducing the size of the debt. It is a course of action the International Monetary Fund, which joined the three European institutions in negotiating the latest bailout, thinks may be necessary for Greece’s debts to become sustainable.

“The high debt to GDP and the gross financing needs resulting from this analysis point to serious concerns regarding the sustainability of Greece’s public debt,” said the analysis, adding that far-reaching reforms were needed to address the worries. It forecasts that the Greek economy will contract by 2.3% this year and a further 1.3% in 2016 before returning to 2.7% growth in 2017.

Greece’s debt to GDP ratio will peak next year but will still be 175% in 2020 and 160% in 2022. The IMF views a debt to GDP ratio above 120% as unsustainable.

The analysis emerged shortly after Greece stunned the financial markets by announcing that its economy grew by 0.8% in the three months leading up to the crisis that forced Athens to close the banks and impose capital controls.

Figures from Greece’s statistical agency ELSTAT showed that the country grew more strongly between April and June than the UK, which advanced by 0.7%, even though the last few weeks of the quarter in Greece were dominated by reports of money leaving the country and fears of a debt default.

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ELSTAT also revised away a fall in GDP in the first three months of 2015 and now says that the economy was at a standstill during that period.

As a result, Greece was no longer technically in recession over the quarter since the economy’s output did not decline for two successive quarters.

The GDP data and news that Brussels backed IMF concerns over debt sustainability came as a boost for the Greek prime minister, Alexis Tsipras. Despite rebellion in the ranks of Tsipras’ leftist Syriza party, the 400-page bailout deal is thought likely to pass through the Athens legislature with the support of opposition parties in a vote not expected until the early hours of Friday.

However, the rescue package, worth up to €85bn (£60bn) over three years and urgently needed to prevent the debt-stricken country defaulting and to keep it in the euro, must still be approved by the other Eurozone member states at a meeting of finance ministers in Brussels on Friday afternoon.

The deal, which surrenders powers over huge areas of economic and social policymaking to Greece’s international creditors, also has to be ratified by a number of national parliaments, including Germany’s – a process Athens wants completed in time for it to make a major €3.2bn payment to the European Central Bank on 20 August.

Germany, however, has repeatedly signalled it will not be rushed into green-lighting the plan and said it needs further clarifications before giving it the go ahead. Deputy finance minister Jens Spahn cast doubt on whether the deal would be approved on Friday, saying the Greek government had “come a long way” and shown a “high degree of willingness to reform” but adding: “We need more details in some areas.”

One explanation for the surprise pick up in Greek growth over the second quarter was that imports collapsed - thus boosting the country’s net export numbers - as the government of Alexis Tsipras became embroiled in long talks with creditors.

A breakdown of the figures also showed that deflation played a part in boosting GDP. Activity contracted slightly in the second quarter but prices fell faster, resulting in a rise in real GDP, which is adjusted for changes in the cost of living.

ELSTAT warned that the flash estimate of growth in the second quarter was likely to be revised after more data had been collected.

“Users should note that the present flash estimates are expected to be revised when provisional estimates are produced and disseminated on August 28 on the basis of updated primary data that will have become available at that point.”

The worst of the Greek crisis occurred in July, with the banks shut for three weeks and restrictions put on cash withdrawals. As a result of the almost complete shutdown of the economy, the International Monetary Fund believes the Greek economy will shrink by around 2% in 2015 as a whole.

Some analysts believe that the decline will be much more profound given that capital controls are still in place.

Greece creditors raise 'serious concerns' about spiralling debt levels | World news | The Guardian

Greeks taste breadth of bailout in loaf and lotion rules

Jon Henley in Athens Friday 14 August 2015

Pharmacists and bakers are among businesses worried that the latest Greece rescue deal, while pushing competition, will harm community enterprises

A bakery in Athens. Tax hikes, spending cuts and detailed regulations for retailers are on the horizon for Greece. Photograph: Milos Bicanski/Getty Images

Christos Vouldis doesn’t see why international institutions like the European Central Bank should tell him how to run his bakery. Nikolleta Stefanidi, meanwhile, is worried for the elderly people who come to her Athens neighbourhood pharmacy for their medicine.

Air and sea ports and the national grid are to be privatised as part of Greece’s latest rescue deal under the new three-year bailout. Taxes will be raised on powerful shipping firms, and VAT increased at an estimated cost to the average Greek household of €650 a year.

But among the headline tax hikes, spending cuts and market reforms, there lurk a few oddities.

The shelf-life of milk, for example, or the weight of a loaf of bread, along with rules on what kind of shop may call itself a bakery. Not to mention the sale of un-bottled tsipouro – home-distilled pomace spirit – or who can legally own a pharmacy.

Greece’s creditors – the ECB, International Monetary Fund, the European commission and its ESM bailout fund – have insisted on all these measures as conditions of the bailout. They come from the two so-called OECD toolkits, a raft of 320 or more recommendations made after the Paris-based body spent most of 2013 analysing where Greece’s tangled web of rules and regulations fell short of what it felt was required of a modern economy.

So (in theory) there will be an end to regulations that limit the shelf-life of pasteurised milk in Greece to just five days, against roughly twice that in most of the rest of the EU, making Greek milk up to 30% more expensive.

Out, too, goes the law that said only a place where bakers mixed ingredients, kneaded dough and produced fresh loaves could call itself a bakery and avoid the “bread sales outlet” definition of just selling defrosted and pre-baked loaves.

“The benefit from abolishing the definition would be the enhancement of competition by creating quality differentiations and by offering a broader choice to consumers,” said the OECD, which also wanted bread sold by the kilo rather than, as was the case until very recently, in standard, fixed-weight loaves.

Vouldis, 33, whose bakery was founded 22 years ago by his parents in the southern Athens suburb of Kallithea, and is one of 15,000 local bakeries in Greece, said: “If a supermarket can call itself a bakery and present frozen loaves as fresh, that’s cheating customers . And if we sell by the kilo – which we’ve been supposed to be doing since Easter, actually, but no one does – customers will end up spending more on their bread. Bakers will have far more opportunity to play around with their prices.

“Neighbourhood bakeries are the heart of a community; it’s wrong to make things harder for them than they already are. And it’s unacceptable to have international institutions saying, you’re stupid, you don’t know how to run your business, here’s how you must do it.”

Stefanidi meanwhile was concerned at the bailout powers’ insistence that anyone should be allowed to own a pharmacy: at present, Greek law limits their ownership to pharmacists.

The way the OECD and the international creditors saw it, far too many laws protected Greece’s 11,000 pharmacies – a quantity, per head of the population, about double that for France or Spain, and more than 15 times Denmark’s total.

Many of the rules were scrapped last year despite a European court upholding Greece’s view that it was perfectly entitled to legislate on the matter since its supreme court had ruled that pharmacies were not pure commercial enterprises but also fulfilled a vital social function.

The rule that no district can have more than one pharmacy per 1,000 people will stay. But the regulation stipulating that over-the-counter medicines may only be sold at licensed pharmacies is soon to be scrapped; and the ownership restriction could be gone next week if the bailout package is approved.

“It’s crazy,” said Konstantinos Lourantos, president of the Panhellenic Pharmaceutical Association, in his pharmacy in the Athens suburb of Nea Smyrni. “Anyone will be able to open a pharmacy now. Anyone. In all Europe, only in Slovenia and Hungary is this allowed. Even in Germany, a licensed pharmacist must own at least 51% of a pharmacy.”

The association fears that behind the institutions’ move to liberalise the pharmacy sector, the big drugs multinationals are lying in wait.

“They say they want to open us up to competition, reduce prices, but all that will happen is the big manufacturers will buy up struggling Greek pharmacists and set up their own chains, perhaps favouring their own products,” said Christos Arvantis, the association’s legal counsel. “How is that competition?”

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Greece’s embattled pharmacies are presently owed an average of about €40,000 each in overdue reimbursements from the country’s cash-strapped health service, Lourantos said. And he denied that Greece’s laws kept drug prices high. “They’re based on an average of the lowest three prices in the EU.”

For Stefanidi, whose small pharmacy is just along the road from Vouldis’s bakery, such arguments were important but not the real issue. “You see, I see my job as providing medicine, not selling products,” she said. “If someone comes in here I won’t sell him something just because it’s nearing its use-by date. I’m a pharmacist, I want it to be the solution. And I’ll make sure it’s safe for him to take in his condition, and with any other drugs he’s taking.”

Above all, though, Stefanidi said, Greek pharmacies were “neighbourhood institutions”. She added: “It’s almost like social work, especially now, with the crisis. If people come in and cannot pay, what am I expected to do? Turn them away?”

She said she was helping five local families, including a couple of older residents, who had little or no income or pension. “And not just with medicines, either,” she said. “Is that protectionism? And how many commercial pharmacy owners, how many supermarkets, would do that?”

Greeks taste breadth of bailout in loaf and lotion rules | World news | The Guardian